A Message to Our Member-Owners

Dear Dakota Energy Member-Owners,

For over 15 years, Dakota Energy Cooperative (Dakota Energy) members-owners have faced nonstop increases in the price we pay for electricity, while the market power price for energy has declined. So long as we remain a member-owner of East River, they require that we purchase 100% our electricity from East River Electric Power Cooperative – and only East River. The result is that we have had no choice but to pay these increasing costs, caused by poor management decisions made by others. East River’s rates have increased more than 100% over the last 15 years. In 2005 our power costs were 50% of Dakota Energy’s expenses and today those costs now account for 72% of our expenses.

At Dakota Energy, we have worked relentlessly to try to come to a solution to this problem with East River, but they have been unwilling to address our concerns. Unfortunately, we could not find a way to provide our member-owners what we all want – stable, potentially even cheaper electricity rates and more control over how and where we get our electricity. For the past two years, Dakota Energy has requested a buyout figure from East River, allowing us to source power from other suppliers. In two years, East River has not given us a number, equitable or not, and claims that it doesn’t have to. This is a breach of East River’s bylaws, which provide that a member shall be permitted to withdraw on equitable terms.

In an attempt to determine our own energy future and protect the future of our member-owners, Dakota Energy Cooperative recently filed a legal complaint asking the court to establish a fair exit fee, something East River has told us they will never provide.

Dakota Energy has a fiduciary responsibility to our member-owners, and we take that very seriously. Our responsibility is to find a more efficient power supplier – one that will listen to Dakota Energy, our community and work with us – not ignore reasonable requests.

We aren’t the first to do this and we don’t expect to be the last. Across the country, electric cooperatives are seeking a better deal for their member-owners – and they’re doing so successfully and without causing financial harm to the other cooperative member-owners. For example, in New Mexico, Kit Carson Electric Cooperative (Kit Carson) reached a fair and reasonable exit fee with Tri-State Generation and Transmission. After Kit Carson pays down their exit fee over the next couple of years, their electricity rates will decrease an expected 40%. There is a similar success story in Colorado, with Delta Montrose Electric Association having recently reached their exit fee agreement with Tri-State. Both cooperatives now have the ability to contract with other power suppliers who will help them keep their electric rates stable, low and provide what Dakota Energy has been seeking – freedom to determine and own our energy future.

By owning our energy future, we can be responsive to what our member-owners want: stable, affordable rates and reliable power. Stable, or even lower rates will not only be a welcome relief for our families, but also our businesses. There is the potential for lower, more stable rates to provide our existing businesses with more financial certainty in these uncertain times and we anticipate that when compared to other member-owners of East River, Dakota Energy territory will look much more appealing to other companies wanting a better and more secure business environment.

I am excited about this opportunity and know that we can be successful moving forward. Dakota Energy Cooperative will always act in the best interest of our member-owners and this is a unique opportunity to build a better future for us all.

Sincerely,

Chad Felderman, CEO/General Manager
Dakota Energy Cooperative